(2) Plaintiff’s decision to sign the Release was not voluntary and informed, as required by Colorado Revised Statute Section 13-22-107;

(3) Release was voidable because it was procured through fraud

Defendant Defenses: Release

Holding: for the defendant, the release was upheld

This case has been working its way through the courts for five years. The plaintiff was a legally blind child with cerebral palsy and cognitive delays. Her mother signed the necessary documentation to take a trip west with Camp Fire USA. Camp Fire USA contracted with the Breckenridge Outdoor Education Center (BOEC) to provide five days of skiing, a rope’s course and snow tubing.

The plaintiff was in a bi-ski which has an instructor holding tethers behind the skier. The BOEC instructor and the plaintiff were on their second run of the day. A third party skier lost control and skied into the tethers causing the BOEC instructor to lose the tethers. The plaintiff went down the hill unrestrained into a group of trees sustaining her injuries.

The plaintiff sued in Federal District Court located in Denver. A magistrate based upon a motion filed by the defendant dismissed the plaintiff’s negligence claim based on a release signed by the Plaintiff and her mother. The defendant’s motion also argued there was no evidence to support a gross negligence claim, which the magistrate did not deny.

The case proceeded to trial on the gross negligence claim. The jury returned a verdict for the defendant. The plaintiff then appealed the dismissal of the negligence claim based upon the release.

A magistrate is a quasi-judge. Magistrates in the Federal Court System are not appointed by the President and approved by the Senate, as all federal court judges are; but are appointed by the Chief Judge of the Federal District Court. The magistrate’s powers come from specific powers given to the magistrate by the judge who assigns a case to a magistrate or from an overall order from the Chief Judge of the court. Normally, a judge appoints a magistrate to handle all pre-trial matters. This frees up the judge to handle trials and those issues that may be appealed from the magistrate.

Summary of the case

The plaintiff appealed three issues concerning the validity of the release:

(1) the Release is as an invalid exculpatory agreement;

(2) [Plaintiff’s mother’s] decision to sign the Release was not voluntary and informed, as required by Colorado Revised Statute Section 13-22-107; [statute allowing a parent to sign away a child’s right to sue] and

(3) to the extent the Release is otherwise enforceable; it is, nevertheless, voidable because it was procured through fraud.

The 10th Circuit Court of Appeals went through a fairly in-depth analysis of release law in Colorado in making its decision. The court first looked into the requirements for a release to be valid under Colorado law. Releases are disfavored under Colorado law; however, they are not void. To be valid a Colorado Court must consider four factors:

(1) the existence of a duty to the public;

(2) the nature of the service performed;

(3) whether the contract was fairly entered into; and

(4) whether the intention of the parties is expressed in clear and unambiguous language

It was the fourth factor, whether the intent of the parties is set forth in clear and unambiguous language that is usually at issue. That means the language is clear and understandable so that the plaintiff when reading the document knew he or she was giving up their right to sue or recover for their injuries. The factor does not require the specific use of the word negligence and/or breach of warranty under Colorado law. However, the language of the release must express that the “intent of the parties was to extinguish liability and whether this intent was clearly and unambiguously expressed.”

Colorado courts look at the actual language of the release for “legal jargon” length, complication any likelihood of confusion or failure of the plaintiff to recognize the full extent of the release provisions. The court found that BOEC’s release met all of the requirements and was valid.

The plaintiff argued that the release failed to tell them that the plaintiff would be using a bi-ski and failed to disclose specific risks of this type of adaptive skiing. The court found that Colorado law did not require releases to refer to the specific activity that injured the plaintiff. Rather a release bars a claim if the release “clearly reflects the parties’ intent to extinguish liability for that type of claim.”

Note: the relaxed language allowed under Colorado law is not the same in other courts.

The plaintiff also developed a novel argument, which I have touched on before.

Plaintiff additionally argues the Release is ambiguous because it does not specifically release claims resulting from the negligence of third parties, such as the skier who collided with Plaintiff, and because it inconsistently allocates risks between herself and Defendant.

Many times a third party or even another participant is the reason for the plaintiff’s injury. I write about injured parties suing other guests or third parties, such as skier v. skier collisions. Although the complaint does not name the outdoor recreation provider, specifically as a defendant, it does bring them in tangentially to a lawsuit. Here, the plaintiff argued the release failed because it did not notice the plaintiff of the risks brought to skiing by third parties.

However, the argument was not properly preserved or argued in the lower court so this court did not look at the argument. Appellate courts only will hear arguments that have been heard or argued in the lower court. Brand new arguments are ignored on appeal. It is important to argue everything you can in the lower court, to preserve all issues for appeal. This works both for claims of the plaintiff or defenses of the defendant.

The next argument, was there was not enough information in the release to satisfy the requirements of the statute which allows a parent to sign away a minor’s right to sue (C.R.S. 13-22-107). The plaintiff argued that because the risks of skiing in a bi-ski were not understood by the mother then the release should fail.

Because the release did not state the risks of the activity, the court had to decide if it could look at extrinsic (other) evidence. The court in Hamel, allowed the defendant to show that prior experience of the parent in sending her daughter to camp and knowledge of other people who had been injured horseback riding was enough to show the mother knew the risks.

The court then allowed the knowledge of the mother and the letter sent with the release by BOEC to show the mother knew the general risks of skiing.

The final issue was the Fraudulent Inducement claim. The letter said the following:

(1) “All of [Defendant’s] activities are conducted in a manner consistent with the highest standards, as defined by the Association for Experiential Education (AEE)”; (2) “The BOEC is accredited by AEE”; and (3) AEE “independently reviews the policies, practices and educational components of applicant organizations and accredits those that meet their high standards.

The mother made the following statements concerning what she believed based upon the letter.

Rather, she [plaintiff] relies on her mother’s statements that she “believed that BOEC was an accredited program,” and “that they had an [sic] accredited certified instructors that would manage a safe program.”

(“[T]hey were, you know, accredited and certified and they’d been doing it for a number of years.”), 356 (“That she would be with certified accredited people in a safe program that they could supervise appropriately.”).)

Although BOEC may or may not have been accredited by the AEE, the issue was the AEE did not have standards for skiing or adaptive skiing. The plaintiff argued that the letter, on one side of the release contradicted the release which was on the other side of the paper.

Add to the issue that BOEC admitted that it did not have what it advertised.

BOEC representative and Ski Program Director Paul Gamber testified that on the day of the Accident, BOEC did not have any written ski lesson policies and procedures for the adaptive ski program. Ski Program Director, Jeffrey Inouye, testified that the AEE accreditation related to programs other than the adaptive [*30] ski program that Ms. Squires attended.

Marketing makes promises that Risk Management has to pay for.

The plaintiff argued that there was fraud in the inducement and because BOEC had advertised standards, BOEC did not have. On top of that the plaintiff argued that because BOEC did not have standards as they advertised BOEC was also misleading the plaintiff.

Ms. Squires argues that based upon the lack of written safety standards, “it is not a stretch to conclude that the adaptive skiing program was not conducted in a manner consistent with the highest standards of the AEE, contrary to the representations made by BOEC in its Greetings Letter.”

The letter and marketing of BOEC were enough to establish a fraud claim.

To establish fraud, a plaintiff has to prove that (1) a fraudulent misrepresentation of material fact was made by the defendant; (2) at the time the representation was made, the defendant knew the representation was false or was aware that he did not know whether the representation was true or false; (3) the plaintiff relied on the misrepresentation; (4) the plaintiff had the right to rely on, or was justified in relying on, the misrepresentation; and (5) the reliance resulted in damages.

The release was presented to the plaintiff’s mother along with a “LETTER TO STUDENTS, PARENTS AND GUARDIANS.” The letter made several statements which the plaintiff brought to the attention of the court, which created legal issues that in many courts in other states, would have found for the plaintiff. Some of the parts of the letter were:

All of our activities are conducted in a manner consistent with the highest standards, as defined by the Association for Experiential Education (AEE). The BOEC is accredited by AEE, who independently reviews the policies, practices and educational components of applicant organizations and accredits those that meet their high standards.

Your ski lesson or course will involve risk, which may be greater than most people encounter in their daily lives. Providing high quality programs in a risk-managed environment is a priority at the BOEC. It is, however, impossible to eliminate all risks.

While the BOEC maintains rigorous standards, it is in everyone’s best interest that risks are disclosed, understood, and assumed prior to participation.

The plaintiff could not prove that she had relied on the misstatements of BOEC. On top of the necessary requirement that there be reliance, the fraud or action of BOEC must be intentional.

Ms. Squires has not produced any evidence that BOEC made the alleged misrepresentations with the intent to deceive. For failure to demonstrate this element, Ms. Squires’ argument that the Release is voidable based on material misrepresentation and fraud in the inducement must fail.

Because the fourth element could not be provided the fraud claim was dismissed.

The final argument made by the plaintiff was the actions of BOEC were willful and wanton. The statute Colo. Rev. Stat. § 13-22-107(4) specifically prohibited releases signed by parents based to stop willful and wanton conduct.

Nothing in this section shall be construed to permit a parent acting on behalf of his or her child to waive the child’s prospective claim against a person or entity for a willful and wanton act or omission, a reckless act or omission, or a grossly negligent act or omission.

Court defined willful and wanton conduct by relating the conduct to gross negligence.

“Gross negligence is willful and wanton conduct; that is, action committed recklessly, with conscious disregard for the safety of others.” “Willful and wanton conduct is purposeful conduct committed recklessly that exhibits an intent consciously to disregard the safety of others. Such conduct extends beyond mere unreasonableness.” (“Conduct is willful and wanton if it is a dangerous course of action that is consciously chosen with knowledge of facts, which to a reasonable mind creates a strong probability that injury to others will result.”)

However, here again the plaintiff failed to show conduct that was purposeful or reckless. The court found the record was “devoid of sufficient evidence to raise a factual issue” at trial. Finding that the court held that claim was not met by the plaintiff.

So Now What?

The release in this case met the requirements of Colorado law. However, most other states, the release would not have been sufficient to stop the claims of the plaintiff. Besides, few states allow a parent to sign away a minor’s right to sue. See States that allow a parent to sign away a minor’s right to sue.

BOEC does great work and does a good job. This like most facts giving rise to litigation are rare, even very rare. However, your release needs to be written to cover everything you possibly can. You can include a prohibition against injuries or claims caused by third parties. Would the outcome of this case been different if the third party who skied into the tethers been another BOEC student or instructor?

Releases can also be used to educate. If you do a good job of describing the risks in the release, then parents cannot make valid decisions, on whether or not they want to risk your kid with them. The defendant should have done a better job of explaining the risks of all activities within the program.

It is risky to rely upon outside information to prove knowledge of a release, unless you can prove the person saw and knew the information and have that proof in the release. This creates a 2-step process. 1.) You must prove you educated the customer or guest and 2.) You must prove the guest or customer was educated. The easiest way is to place this information on your website and then have your release reference the information.

Marketing makes promises that Risk Management must pay for. The advertising and statements made by the defendant in this case in many other jurisdictions would have gone the other way. Seriously, to make statements about awards, accreditation, or standards that do not exist are a great way to void a release and in many states increase the damages you may pay.

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One Comment on “Marketing Makes Promises that Risk Management (or in this case an insurance policy) must pay for.”

This case is a great example for making sure releases include all possible, or at least as much as is possible, issues that arise. Especially with 3rd party elements and possible mismarketing. Interesting read, thanks.

35 Years of Outdoor Retailer

James Moss JD, Author

Recognized as the Go to Lawyer by the Outdoor Recreation Industry

The outdoor industry’s favorite lawyer, Moss has been known to don a toga at a show party and he learns from what he observes on the show floor. “Attending a trade show year after year allows you to watch the industry evolve, grow, change and sometimes shrink,” he says. “It shows you new sports, new activities, and new ways to get sued. Outdoor Retailer is both a barometer and an education in the outdoor recreation industry.”